only propose or adopt regulations where the benefits would justify the costs;

tailor regulations so that they impose the smallest burden on society, while remaining consistent with regulatory objectives;

select regulatory approaches that maximize net benefits;

specify, to the extent possible, performance objectives rather than behaviors or manners of compliance that regulated entities must adopt; and

identify and assess available alternatives to direct regulation.

However, neither of these Executive Orders were applicable to independent regulatory agencies, so on July 11, 2011 President Obama issued Executive Order 13579 –Regulation and Independent Regulatory Agencies, which directs the independent regulatory agencies to comply with with Executive Order 13563 as well as to produce a plan for the retrospective analysis of significant existing regulations that may be “outmoded, ineffective, insufficient, or excessively burdensome” and for determining whether those regulations “should be modified, streamlined, expanded, or repealed so as to make the agency’s regulatory program more effective or less burdensome … .”

Among other things, OIRA’s memo states that agency plans should not “call into question the value of longstanding … rules simply because they are longstanding[; rather they should] create a defined method and schedule for identifying certain significant rules that are obsolete, unnecessary, redundant, unjustified, excessively burdensome, or counterproductive.” Citing, for example, regulations that have been overtaken by new technologies or that impose significant reporting or paperwork burdens. Additionally OIRA’s memo notes that beyond the elimination of obsolete or unnecessary regulations, plans should also consider whether new, expanded or somewhat revised regulations are required.

The Commission’s Plan for Retrospective Review

Yesterday, in light of the requirements of Executive Order 13579 and OIRA’s suggestions, the Commission issued an invitation for public comment on the development of its plan for retrospective analysis of significant existing regulations. In addition to general comments on what the scope and elements of the plan should be, the Commission is seeking comment on several specific questions:

What factors should the Commission consider in selecting and prioritizing rules for review?

How often should the Commission review existing rules?

Should different rules be reviewed at different intervals? If so, which categories of rules should be reviewed more or less frequently, and on what basis?

To what extent does relevant data exist that the Commission should consider in selecting and prioritizing rules for review and in reviewing rules, and how should the Commission assess such data in these processes? To what extent should these processes include reviewing financial economic literature or conducting empirical studies? How can our review processes obtain and consider data and analyses that address the benefits of our rules in preventing fraud or other harms to our financial markets and in otherwise protecting investors?

What can the Commission do to modify, streamline, or expand its regulatory review processes?

How should the Commission improve public outreach and increase public participation in the rulemaking process?

Is there any other information that the Commission should consider in developing and implementing a preliminary plan for retrospective review of regulations?

Comments can be submitted electronically or in paper form, and should be received by October 6, 2011. The Commission has until November 7, 2011 to publicly release its plan.

Comments About the Plan; Not the Regulations

Now before you get too excited and fire off a wish list of “outmoded, ineffective, insufficient, or excessively burdensome” regulations that you’d like to see the Commission modify or repeal, take note that that’s not what’s going on here.

The Commission is not seeking comments on specific regulations for review, only on the overall process for reviewing existing regulations, and, as noted in the OIRA memo and the Commission’s release, any process put forth will reflect “constraints imposed by limits on resources and competing priorities.” So, given the Commission’s ongoing budgetary constraints and the rulemaking demands of Dodd-Frank, I’m not sure we’ll see much in the way of additional reform, outside of what’s already underway or planned, at least not anytime in the near future.

But don’t scrap that wish list just yet, remember the Commission did voluntarily set up a website seeking public comment “on modifying, streamlining, expanding or repealing … existing rules to better promote economic growth, innovation, competitiveness and job creation …” shortly after President Obama first issued Executive Order 13563. Many of your suggestions can probably be submitted over there.

[…] how the Commission plans to enhance its oversight of FINRA. The report emphasizes the utility of retrospectives reviews and recommends that the Commission encourage FINRA to conduct its own retrospective rule reviews […]